The company – which specializes in repurposing drugs already approved for other purposes – has signed a letter of intent to license a sublingual formation for drugs used to treat erectile dysfunction. Sublingual formations (which allow drugs to be dissolved under the tongue) absorb more quickly and therefore take effect sooner.

"We expect to move this product through pivotal trials and through regulatory approval over the next year and intend to begin marketing within two years," said Pacific Therapeutics CEO Douglas Unwin.

"We expect to complete the license in the first quarter of 2013, and move rapidly to the late-stage clinical trials and marketing."

In 2006, the market for drugs for treating erectile dysfunction exceeded $3 billion, the company said.

Pacific Therapeutics has two other drugs in the pipeline, both of which are for the treatment of scarring of human tissue.

Its lead product, PTL-202, is a combination of drugs being tested for efficacy in treating idiopathic pulmonary fibrosis, a progressive scarring of the lungs. The drug is already approved by the Food and Drug Administration in the U.S. and is currently in stage one of clinical trials.